SWIFT WORKING WITH MAJOR PRIME BROKERS ON HEDGE FUND TRADE MATCHING SOLUTION

Posted August 6, 2008

BRUSSELS – Global financial industry messaging utility SWIFT plans to develop and run a centralized pre-settlement trade matching solution intended to reduce cost and risk in processing equity and fixed-income trades originated by hedge funds, in an effort that will include six major prime brokers and set to launch in pilot form in the fourth quarter.

Citi, Credit Suisse, Goldman Sachs, Lehman Brothers and Merrill Lynch are among the firms collaborating with SWIFT on the solution. By enabling trade matching on trade date or T+1, the solution will identify errors that could cause failed settlements to be identified up to two days sooner than they are now, therefore reducing brokers’ risk. The solution is based on SWIFT’s Accord central matching service and will use industry standard messaging.

“We are delighted to have been chosen by this group of major prime brokers to provide a pre-settlement matching solution to the equity and fixed-income markets, in addition to our existing FX matching capabilities,” says Gottfried Leibbrandt, Head of Markets at SWIFT.

The brokerage firms have agreed to oversee the solution and provide transparency to the market on its evolution.